EUR/GBP: Resistance at 0.9150/65 to be an important cap – Credit Suisse

EUR/GBP maintains a near-term base above 0.9007, but analysts at Credit Suisse view the current strength as temporary with resistance at 0.9150/65 ideally set to cap.

Key quotes

“EUR/GBP has held support from its rising 55-day average and with a small base in place above the downtrend from September and mid-November high at 0.9001/07, further near-term strength is still seen likely. Our bias though remains to view this phase as temporary ahead of an eventual fall back to retest 0.8866/61.” 

“Support at 0.8983 holding can keep the immediate risk higher with key resistance seen at the ‘measured base objective’ at 0.9150. With the October high just above at 0.9165, we would look for a fresh and impotant cap here to maintain the risk that the recent rebound is the ‘right shoulder’ to a larger top.” 

“Below 0.8983 should see the base neutralized for a fall back towards 0.8929, with this seen as the barrier to a retest of 0.8666/61, an eventual break of which can confirm a major top.”